Trinity Mirror reports 67 per cent regionals profit boost

Aquisitions from Guardian Media Group, cost reduction and increased advertising funds have produced

Trinity Mirror increased operating profits at its regional newspaper business by 67 per cent year-on-year in the first six months of the year helped by revenue from its newly-acquired regional newspapers.

Total adjusted operating profit across the group increased by 25.7 per to £61.7m in the six months to 4 July from the £49.1m made in the same period the previous year.

Trinity Mirror said the increase came though a combination of cost reduction, increasing advertising revenue and value brought to the business by the recent acquisition from Guardian Media Group of GMG Regional Media, which includes the Manchester Evening News and its associated weekly newspapers.

Operating margin across the group also increased by 3.3 per cent to 16.1 per cent, the company said.

Overall, the group generated total revenue of £382.2m, an almost identical figure to the £383m in made in the same period in 2009.

Trinity Mirror said if it were not for income generated after acquiring GMG Regional Media, revenues across the group would have been down by five per cent to £364m.

However, even this demonstrated a clear underlying improvement in revenue trends, the company said, when compared to the revenue decline of 12.4 per cent experienced during 2009.

Trinity Mirror said its mix of advertising, circulation and other revenues helped provide resilience through the downturn.

Advertising revenues now accounted for 46 per cent of total revenue, the company said, and within advertising non-classified advertising accounted for 58 per cent.

Regionals

The regional newspaper division saw total revenue rise by 4.5 per cent to £162.4m in the period, up from £155.4m last year.

Adjusted operating profit at Trinity Mirror's regional newspaper business increased by £11.6m - from £17.3m last year - to £28.9m in the period - a rise of 67.1 per cent.

The company said the acquisition of GMG's 36 regional newspapers, including the Manchester Evening News, had proved "highly successful".

"Since completing the acquisition the business [GMG Regional] has delivered a strong revenue and profit performance with revenues of £18.2 million and operating profit of £2.7 million," Trinity Mirror said today in its half-year results.

Nationals

The national newspaper market remained highly competitive, the company said, as a result of the continued cover price discounting by its competitors - particularly The Sun and the Daily Star - and the impact of fragile economic conditions.

Trinity Mirror said its national newspaper business, Mirror Group Newspapers, grew advertising revenue each month during the period with particularly strong double-digit growth in June, in part driven by the World Cup.

Over the period ad revenue at MGN grew by 2.2 per cent to £65.8m. Despite this, overall revenue generated by its national titles fell by 3.4 per cent from £227.6m to £219.8m in the period, mainly as a result of declining circulation revenue which dropped 6.2 per cent to £125m.

Operating profit at MGN increased by £1.3m from £38.2m to £39.5m, the company said, thought tight cost management.

Trinity Mirror is currently is engaged in a consultation with staff over plans to drop around 200 posts - both full-time and casual - from its London-based nationals.

Cost-cutting

The company said it managed to reduce its overall costs by £29m in the period, excluding operating costs of £15.5m for GMG Regional Media which it bought in March.

In addition, the company increased its cost-savings target for the year by £5m to £25m, of which it delivered £15m in the first half of the year.

Trinity Mirror said strong cash-generation helped it reduce its net debt by £15.6m over the period to £308.4m.